Netflix (NFLX) stock jumped Friday after the internet television network reported more new subscribers than expected in the fourth quarter. However, its profit missed views.
The streaming video leader late Thursday said it added 7.66 million new subscribers worldwide in the December quarter, ending the year with 230.75 million total subscribers. Analysts polled by FactSet expected Netflix to add 4.57 million new subscribers.
However, the Los Gatos, Calif.-based company missed Wall Street’s sales and earnings targets for the fourth quarter. Netflix earned 12 cents a share on revenue of $7.85 billion in the period. Wall Street had predicted earnings of 55 cents a share on sales of $7.86 billion. In the year-earlier period, Netflix earned $1.33 a share on sales of $7.71 billion.
Its guidance for the current quarter was mixed, with its profit target missing views but its sales forecast edging above estimates.
Netflix Stock Rises After Report
In morning trades on the stock market today, Netflix stock jumped 8.4% to 342.36. During the regular session Thursday, Netflix stock fell 3.2% to close at 315.78.
For the first quarter, Netflix expects to earn $2.82 a share on sales of $8.17 billion. Analysts were looking for earnings of $2.98 a share on sales of $8.15 billion in the March quarter. In the same quarter last year, Netflix earned $3.53 a share on sales of $7.87 billion.
Netflix executives said they are focused on profitability as rivals lose billions trying to catch up.
“We believe we have a clear path to reaccelerate our revenue growth: continuing to improve all aspects of Netflix, launching paid sharing and building our ads offering,” Netflix management said in a letter to shareholders. “As always, our north stars remain pleasing our members and building even greater profitability over time.”
Popular content on Netflix in the fourth quarter included “Wednesday,” “Harry & Meghan,” “Troll” and “Glass Onion.”
Leadership Change Announced
In other news, Netflix announced that co-founder Reed Hastings has stepped down as co-chief executive officer to become executive chairman, completing a succession process.
Meanwhile, Chief Operating Officer Greg Peters was named co-CEO, joining fellow co-CEO Ted Sarandos.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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